Tax Query

carrollmark

Could somebody help me with this tax query.

I'm self employed and want to pay myself €800 per week after tax.

What will this cost my company per year?

What about PRSI?

I'm married and my wife also works by the way.

Be really grateful if someone could work this out for me.

jayok

Not a simple question without more info I am afraid. As there's Employers PRSI (which depends on whether you are a director or not), your personal tax credits, etc before we can end up at the €800 pm.

To simplify the calculation (there's accountant knocking around here that can give you more bang on figures, Kluivert I believe). Anyhow, this is my guesstimate.

Assume your wife has all your tax credits.

From the Revenue:

"Rates of Contribution
Standard Rate: Class S contributions are payable at 3% of reckonable income subject to a minimum payment of €253.00. An additional 2% Health Contribution is payable on total income, if annual income exceeds €18,512.00. These figures may change regularly: changes will be published in leaflet SW 19."

Want €800 pm or €9,600 pa. Ok double it to guesstimate gross €19,200 , let's pick €18,500 to avoid health levy.

€18,500 less 3% PRSI = 17,925

€17,925 @ 42% = €7537

Net Income = €10,388 pa.

From these very rough figures I would estimate it would cost your company less that €18,500 pa.

Now these figures are probably a complete mess. Over to the experts then.

kluivert

AS ^^^^^ Said need more info.

Information needed:

Your tax credits
Your wifes tax credits

How much GROSS your wife earns
How much GROSS you earn from other employments.

Then its a simply calculation.

To answer your question.

The cost to the Company

IF you are a company director then the cost to the company is 5% (PRSI) (Class S) Ie 40e per month. Total cost is 840e per month

IF your an employee ( doubt it but just in case ) then PRSI (Class A) is 10.75% or 86e per month. Total cost is 886e per month.

Pythia

jayok wrote:

Want €800 pm or €9,600 pa. Ok double it to guesstimate gross €19,200

He said 800 a week, not a month!

spaceballs

As everyone said earlier there is more info need beforesomeone can say for sure but making a few assumptions, basically that your own tax cut off is €32k per annum, that your tax credit is €1,580 (both excluding your wifes allocation which I am assume she uses in full), that you are both a director and controlling party of your company (if you are then your Employees PRSI is at 5%, and there is no employers prsi, if you are not then you will have a different rate of employees PRSI and the employers PRSI will be 10.75% of your gross salary) and also assuming that all the tax credits and cut off which you are entitled to are fully allocated to this employement then the cost to the company would be approx €62,226.

Worked out as follows:

Gross Pay.................................................62,226

Paye:
32,000 x 20%................6,400
30,226 x 42%...............12,695
.................................19,095
Less Tax Credit............(1,580)..................(17,515)

PRSI (Class S1)
62,226 x 5%................................. .......... (3,111)

Net Pay for a year.................... .................41,600

Ie. equal to €800 x 52 weeks

Obviously this is based on a number of assumptions so there's probably a few things that will be different in your case but I hope it helps.